June 15, 2010 14:29 ET

Hospitals Are Scoring Well Below Expectations on Value-Based Purchasing Performance Scale and May Lose Millions in Medicare Reimbursements

IRVING, TX--(Marketwire - June 15, 2010) - Beginning Oct. 1, 2012, Medicare will link financial payments to hospitals to quality outcomes and patient satisfaction under a value-based purchasing model. Hospitals that don't perform well could lose millions of dollars in Medicare reimbursements.

To gain a better appreciation of the potential impact the new legislation will have on hospitals, VHA Inc., the national health care network, analyzed the performance scores for hospitals nationwide and found the national median VBP score is 53, with patient satisfaction scores, known as HCAHPS, acting as a drag on the overall score. To maximize Medicare reimbursement opportunities, VHA estimates hospitals must push their scores above 70, which represents the current top decile. VHA calculated VBP performance scores for hospitals based on the methodology the Centers for Medicare and Medicaid Services presented to Congress in November 2007 as part of its report on value-based purchasing.

"Many hospital executives are shocked to see their overall performance score, and they are concerned when we begin to explain the potential impact on their organization in a value-based purchasing environment," said Trent Haywood, MD, JD, VHA's chief medical officer and the former deputy chief medical officer at CMS. "Hospitals are doing well across the board relative to their clinical core measures, but their HCAHPS scores will place them at risk."

To help members improve their clinical and patient satisfaction scores and to prevent future reimbursement losses, VHA announced its Value Insurance Program Services in May 2010. VHA's VIP Services is precisely designed to help each organization focus on its specific VBP performance improvement needs.

Haywood points out that hospitals will receive CMS reimbursement incentives for either achieving the baseline performance score or for achieving a specific level of improvement relative to their baseline score. This means that taking action now is important even for hospitals that are performing poorly and for whom top decile performance seems unattainable.

Hospital executives can gain a clearer understanding of what they know about VBP by taking VHA's online VBP IQ Challenge at www.vha.comThe VBP IQ Challenge highlights where organizations may be vulnerable with respect to their VBP knowledge.

VHA Inc., based in Irving, Texas, is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance and identify and implement best practices to improve operational efficiency and clinical outcomes. Formed in 1977, through its 16 regional offices, VHA serves more than 1,400 hospitals and more than 25,500+ non-acute care providers nationwide. VHA was ranked by Modern Healthcare as the 7th best place to work in health care in 2009.

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